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Telecom major Bharti Airtel will report earnings after market hours on Monday, October 31. The company is likely to report consolidated revenue growth in low-single-digits, according to a CNBC-TV18 poll.

The poll further indicates that operating performance is likely to be flat compared to the June quarter. However, net profit is likely to rise 50 percent as the June quarter bottomline was lower due to high finance costs. The company's net profit in the June quarter had declined 20 percent.

Bharti's India Mobile revenue is likely to increase 1.3 percent on a sequential basis. This rate will be slower than the growth seen over the last four quarters. Growth in the India business has been recently been driven by a rise in the Average Revenue per User, due to price hikes taken in December.

The company's Average Revenue Per User (ARPU) is likely to grow by 1-2 percent compared to the June quarter, led by existing customers upgrading their plans. ARPU has increased steadily over the last few quarters and is nearing its near-term target of Rs 200.

Chairman Sunil Bharti Mittal envisages the company's ARPU to hit Rs 300 over the long term.

Impact of the tariff hikes undertaken in December last year has fully played out in the subsequent quarters of March and June.

Also Read: As Bharti Airtel rolls out 5G Plus in 8 cities, Morgan Stanley expects telcos to hike 4G tariffs

Subscriber growth for Bharti Airtel is likely to be negligible this quarter. Data from the Telecom Regulatory Authority of India shows the company's subscriber growth lagging Reliance Jio between the April-July period.

Bharti Airtel added only 0.5 million subscribers in July.

The street will be watching out for another round of price hikes from the company has the 5G rollout gathers steam. At the 5G launch earlier this month, Chairman Sunil Bharti Mittal had said that the company aims to have a complete rollout of 5G services across the country by March 2024. It currently has 5G services operational in eight cities, including New Delhi, Mumbai, Varanasi and Bengaluru.

Also Read: Airtel 5G Plus goes live in 8 cities — no SIM change needed, 4G cards will work for now

Airtel Africa's Performance

The company’s Africa-based unit Airtel Africa reported that its revenue grew 13 percent year-on-year to $2.57 billion from $2.27 billion in the half-year that ended in September.

Airtel Africa’s total customer base rose 9.7 percent to 134.7 million during the period, with the telco noting ‘increased penetration’ across mobile data and mobile money services.

Airtel Africa’s net profit stood at $330 million, down 1.5 percent year-on-year, due to adverse foreign exchange movement and derivative losses of $160 million.

Airtel Africa also declared an interim dividend of 2.18 cents compared to 2 cents a year before.

Dividend Time?

A note from brokerage firm UBS earlier this month said that Bharti Airtel's balance sheet is in good shape and that it estimates the company to have excess cash flow of $16.5 billion between the current and financial year 2027.

UBS believes that Bharti Airtel is in good shape to initiate and gradually increase dividend payout from the next financial year. It estimates a dividend payout of 20 percent of profit for the next financial year, which may increase to 65 percent by financial year 2027.

The brokerage further adds that initiating a dividend policy and a medium-term target will also reduce the risk of Singtel further reducing its stake in the company - a possibility which otherwise cannot be ruled out.

Shares of Bharti Airtel are trading at their 52-week high and have gained nearly 20 percent this year.

Also Read: One satellite launch likely every month, says Sunil Mittal after Indian rocket launches 36 OneWeb satellites

First Published:Oct 31, 2022 8:42 AM IST